Table 2

Senior Loan Officer Opinion Survey on Bank Lending Practices
at Selected Branches and Agencies of Foreign Banks
in the United States
1

(Status of policy as of April 2009)

Questions 1-6
ask about commercial and
industrial (C&I) loans at your bank. Questions 1-3 deal with
changes in your bank's lending policies over the past three
months. Questions 4-5 deal with changes in demand for C&I loans
over the past three months. Question 6 asks
about changes in prospective demand for C&I loans at your
bank, as indicated by the volume of recent inquiries about the
availability of new credit lines or increases in existing
lines. If your bank's lending policies have not changed over the
past three months, please report them as unchanged even if the
policies are either restrictive or accommodative relative to
longer-term norms. If your bank's policies have tightened or
eased over the past three months, please so report them
regardless of how they stand relative to longer-term norms.
Also, please report changes in enforcement of existing policies
as changes in policies.

1.
Over the past three months, how have your bank's credit
standards for approving applications for C&I loans or credit
lines—other than those to be used to finance mergers and
acquisitions—changed?

All Respondents

Banks

Percent

Tightened considerably

2

8.7

Tightened somewhat

5

21.7

Remained basically unchanged

16

69.6

Eased somewhat

0

0.0

Eased considerably

0

0.0

Total

23

100.0

2.
For applications for C&I loans or credit lines—other than
those to be used to finance mergers and acquisitions—that your
bank currently is willing to approve, how have the terms of
those loans changed over the past three months?

3.
If your bank has tightened or eased its credit standards or
its terms for C&I loans or credit lines over the past
three months (as described in questions 1 and 2), how
important have been the following possible reasons for the
change?

d.
More aggressive competition from
other banks or nonbank lenders (other financial intermediaries
or the capital markets)

All Respondents

Banks

Percent

Not important

0

--

Somewhat important

0

--

Very important

0

--

Total

0

--

e.
Increased tolerance for risk

All Respondents

Banks

Percent

Not important

0

--

Somewhat important

0

--

Very important

0

--

Total

0

--

f.
Increased liquidity in the
secondary market for these loans

All Respondents

Banks

Percent

Not important

0

--

Somewhat important

0

--

Very important

0

--

Total

0

--

g.
Reduction in defaults by
borrowers in public debt markets

All Respondents

Banks

Percent

Not important

0

--

Somewhat important

0

--

Very important

0

--

Total

0

--

h.
Improvement in your bank's
current or expected liquidity position

All Respondents

Banks

Percent

Not important

0

--

Somewhat important

0

--

Very important

0

--

Total

0

--

4.
Apart from normal seasonal variation, how has demand for C&I
loans changed over the past three months? (Please consider
only funds actually disbursed as opposed to requests for new
or increased lines of credit.)

All Respondents

Banks

Percent

Substantially stronger

0

0.0

Moderately stronger

6

26.1

About the same

11

47.8

Moderately weaker

4

17.4

Substantially weaker

2

8.7

Total

23

100.0

5.
If demand for C&I loans has strengthened or weakened over
the past three months (as described in question 4), how important have been the
following possible reasons for the change?

f.
Customer borrowing shifted
from your bank to other bank or nonbank credit sources because
these other sources became more attractive

All Respondents

Banks

Percent

Not important

4

80.0

Somewhat important

1

20.0

Very important

0

0.0

Total

5

100.0

6.
At your bank, how has the number of inquiries from potential
business borrowers regarding the availability and terms of new
credit lines or increases in existing lines changed over the
past three months? (Please consider only inquiries for
additional C&I lines as opposed to the refinancing of
existing loans.)

All Respondents

Banks

Percent

The number of inquiries has increased substantially

0

0.0

The number of inquiries has increased moderately

7

30.4

The number of inquiries has stayed about the same

10

43.5

The number of inquiries has decreased moderately

5

21.7

The number of inquiries has decreased substantially

1

4.3

Total

23

100.0

Questions 7-8
ask about commercial real
estate loans at your bank, including construction and land
development loans and loans secured by nonfarm nonresidential
real estate. Question 7 deals with changes in
your bank's standards over the past three months. Question 8 deals with changes in demand. If your bank's
lending standards or terms have not changed over the relevant
period, please report them as unchanged even if they are either
restrictive or accommodative relative to longer-term norms. If
your bank's standards or terms have tightened or eased over the
relevant period, please so report them regardless of how they
stand relative to longer-term norms. Also, please report changes
in enforcement of existing standards as changes in
standards.

7.
Over the past three months, how have your bank's credit
standards for approving applications for commercial real
estate loans changed?

All Respondents

Banks

Percent

Tightened considerably

0

0.0

Tightened somewhat

5

33.3

Remained basically unchanged

10

66.7

Eased somewhat

0

0.0

Eased considerably

0

0.0

Total

15

100.0

8.
Apart from normal seasonal variation, how has demand for
commercial real estate loans changed over the past three
months?

All Respondents

Banks

Percent

Substantially stronger

0

0.0

Moderately stronger

0

0.0

About the same

10

66.7

Moderately weaker

1

6.7

Substantially weaker

4

26.7

Total

15

100.0

9.
Over the past three months, how has your bank changed the size of credit lines for existing customers with the following types of accounts? Please consider changes made to line sizes during the life of existing credit agreements as well as changes made to line sizes upon renewal or renegotiation of existing agreements. (Please rate the degree of change for each type of account using the following scale: 1=increased considerably, 2=increased somewhat, 3=remained basically unchanged, 4=decreased somewhat, 5=decreased considerably.)

a.
Business credit card accounts

All Respondents

Banks

Percent

Increased considerably

0

0.0

Increased somewhat

0

0.0

Remained basically unchanged

6

100.0

Decreased somewhat

0

0.0

Decreased considerably

0

0.0

Total

6

100.0

b.
C&I credit lines (excluding business credit card accounts)

All Respondents

Banks

Percent

Increased considerably

1

4.8

Increased somewhat

2

9.5

Remained basically unchanged

10

47.6

Decreased somewhat

8

38.1

Decreased considerably

0

0.0

Total

21

100.0

c.
Commercial construction lines of credit

All Respondents

Banks

Percent

Increased considerably

0

0.0

Increased somewhat

1

7.7

Remained basically unchanged

6

46.2

Decreased somewhat

6

46.2

Decreased considerably

0

0.0

Total

13

100.0

d.
Lines of credit for financial firms

All Respondents

Banks

Percent

Increased considerably

0

0.0

Increased somewhat

1

7.1

Remained basically unchanged

6

42.9

Decreased somewhat

6

42.9

Decreased considerably

1

7.1

Total

14

100.0

In recent quarters, loan delinquencies and chargeoffs have continued to increase. Question 10
asks about your bank’s expectations for the behavior of these measures of loan quality in 2009.

10.
Assuming that economic activity progresses in line with consensus forecasts, what is your bank’s outlook for delinquencies and chargeoffs on existing loans to businesses in 2009?

A.
Outlook for loan quality on C&I loans:

All Respondents

Banks

Percent

Loan quality is likely to improve substantially

0

0.0

Loan quality is likely to improve somewhat

0

0.0

Loan quality is likely to stabilize around current levels

4

17.4

Loan quality is likely to deteriorate somewhat

13

56.5

Loan quality is likely to deteriorate substantially

6

26.1

Total

23

100.0

B.
Outlook for loan quality on commercial real estate loans:

All Respondents

Banks

Percent

Loan quality is likely to improve substantially

0

0.0

Loan quality is likely to improve somewhat

0

0.0

Loan quality is likely to stabilize around current levels

2

13.3

Loan quality is likely to deteriorate somewhat

5

33.3

Loan quality is likely to deteriorate substantially

8

53.3

Total

15

100.0

For this question, 4 respondents answered “My bank does not originate this type of loan.”

Questions 11-14
ask about international trade finance at your bank. Question 11 asks whether your bank provides international trade finance. Question 12 deals with changes in your bank’s standards and terms over the past six months. Questions 13-14 deal with changes in demand for such credit. If your bank’s lending standards or terms have not changed over the relevant period, please report them as unchanged even if they are either restrictive or accommodative relative to longer-terms norms. If your bank’s standards or terms have tightened or eased over the relevant period, please so report them regardless of how they stand relative to longer-term norms. Also, please report changes in enforcement of existing standards as changes in standards.

11.
Some banks provide international trade finance through letters of
credit guaranteeing payment, overdraft facilities, and other
mechanisms for facilitating trade. Does your bank provide
international trade finance?

All Respondents

Banks

Percent

Yes

18

81.8

No

4

18.2

Total

22

100.0

12.
If your answer to question 11 was ‘Yes,’ over the past six months how have your bank’s credit standards and terms for providing such finance changed?

All Respondents

Banks

Percent

Tightened considerably

2

11.1

Tightened somewhat

6

33.3

Remained basically unchanged

10

55.6

Eased somewhat

0

0.0

Eased considerably

0

0.0

Total

18

100.0

13.
If your bank provides international trade finance (answer ‘Yes’ to question 11), and your bank has tightened or eased its credit standards or its terms for credit over the past six months (as described in question 12), how important have been the following possible reasons for the change? (Please respond to either A or B, as appropriate, and rate each possible reason using the following scale: 1=not important, 2=somewhat important, 3=very important)

A.
Possible reasons for tightening credit standards or terms:

a.
Deterioration in your bank’s current or expected capital or liquidity position

All Respondents

Banks

Percent

Not Important

3

37.5

Somewhat Important

4

50.0

Very Important

1

12.5

Total

8

100.0

b.
Less favorable or more uncertain economic outlook for the United States

All Respondents

Banks

Percent

Not Important

0

0.0

Somewhat Important

8

100.0

Very Important

0

0.0

Total

8

100.0

c.
Less favorable or more uncertain economic outlook abroad

All Respondents

Banks

Percent

Not Important

0

0.0

Somewhat Important

5

62.5

Very Important

3

37.5

Total

8

100.0

d.
Increased concern about foreign country risk

All Respondents

Banks

Percent

Not Important

0

0.0

Somewhat Important

7

87.5

Very Important

1

12.5

Total

8

100.0

e.
Worsening of industry-specific problems

All Respondents

Banks

Percent

Not Important

2

25.0

Somewhat Important

6

75.0

Very Important

0

0.0

Total

8

100.0

f.
Less aggressive competition from other banks or nonbank lenders (other financial intermediaries on the capital markets)

All Respondents

Banks

Percent

Not Important

7

87.5

Somewhat Important

1

12.5

Very Important

0

0.0

Total

8

100.0

g.
Reduced tolerance for risk

All Respondents

Banks

Percent

Not Important

1

12.5

Somewhat Important

6

75.0

Very Important

1

12.5

Total

8

100.0

h.
Decreased liquidity in the secondary market for these loans

All Respondents

Banks

Percent

Not Important

4

50.0

Somewhat Important

3

37.5

Very Important

1

12.5

Total

8

100.0

B.
Possible reasons for easing credit standards or terms:

a.
Improvement in your bank’s current or expected capital or liquidity position

All Respondents

Banks

Percent

Not Important

0

--

Somewhat Important

0

--

Very Important

0

--

Total

0

--

b.
More favorable or less uncertain economic outlook for the United States

All Respondents

Banks

Percent

Not Important

0

--

Somewhat Important

0

--

Very Important

0

--

Total

0

--

c.
More favorable or less uncertain economic outlook abroad

All Respondents

Banks

Percent

Not Important

0

--

Somewhat Important

0

--

Very Important

0

--

Total

0

--

d.
Decreased concern about foreign country risk

All Respondents

Banks

Percent

Not Important

0

--

Somewhat Important

0

--

Very Important

0

--

Total

0

--

e.
Improvement in industry-specific problems

All Respondents

Banks

Percent

Not Important

0

--

Somewhat Important

0

--

Very Important

0

--

Total

0

--

f.
More aggressive competition from other banks or nonbank lenders (other financial intermediaries on the capital markets)

All Respondents

Banks

Percent

Not Important

0

--

Somewhat Important

0

--

Very Important

0

--

Total

0

--

g.
Increased tolerance for risk

All Respondents

Banks

Percent

Not Important

0

--

Somewhat Important

0

--

Very Important

0

--

Total

0

--

h.
Increased liquidity in the secondary market for these loans

All Respondents

Banks

Percent

Not Important

0

--

Somewhat Important

0

--

Very Important

0

--

Total

0

--

14.
If your bank provides international trade finance (answer ‘Yes’ to question 11), apart from normal seasonal variation, how has demand for trade credit changed over the past six months?

All Respondents

Banks

Percent

Substantially stronger

0

0.0

Moderately stronger

4

22.2

About the same

8

44.4

Moderately weaker

4

22.2

Substantially weaker

2

11.1

Total

18

100.0

1. As of December 31, 2008, the 23 respondents had combined
assets of $1.0 trillion, compared to $1.9 trillion for
all foreign related banking institutions in the United
States. The sample is selected from among the largest
foreign-related banking institutions in those Federal
Reserve Districts where such institutions are common.